Today In Commodities: European Contagion

By Matthew Bradbard: Energy: With crude oil collapsing over $10 in the last week we've gotten the correction I had anticipated. If readers remember I was calling for $97.50 4-6 weeks ago. The next support level is $94 followed by $90 in the June contract. Based on the buying the last two days lifting prices to close near their highs I think most of the easy money has been made on bearish trades. I've advised energy traders to book profits on shorts. I've yet to issue a buy recommendation but I notice some guys I communicate with are wading into longs. That may be the right move but a low is yet to be determined. High to low in terms of wholesale prices RBOB price came down nearly 50 cents in just over two months. Prices are now oversold and I do not see much more depreciation. Consecutive closes above $3 would getComplete Story »

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By Matthew Bradbard: Energy: Crude oil has completed a 50% Fibonacci retracement, losing another 1.5% today. This is the first settlement under $90/barrel since the first week of August. The 100 day MA should now serve as resistance. While the easy money has been made on bearish trade, I think we could see a probe under $87. Then I will unload any remaining shorts for clients and advise you to do the same. RBOB advanced 1.8% today, closing back above its 18 day MA.

By Matthew Bradbard: Energy: Light volume can exaggerate moves, so let's see what happens the remainder of the week. $100 was rejected in November crude oil futures, with a near $5 trading range in today's action. A close under $96.50 puts November back under the trend line. I see support at $94.50, followed by $91. RBOB lost nearly 3% trading as low as 2.78 -- 16 cents off its highs. This was the first settlement under the 18 day MA since late June.

MUMBAI: Indian markets may see a modest bounce-back this week after a bout of heavy sell-offs in the past two weeks as indices have technically moved to oversold zone. But the cheer could be short-lived as concerns over disappointing corporate earnings and the dodgy MAT issue continue to haunt the Street. Analysts say traders will keep a close watch on the Nifty testing the 8,000 levels, though markets are close to bottoming out. Heavyweights such as Hindustan Unilever, Grasim, Kotak Mahindra Bank, Hero MotoCorp and PNB will announce their quarterly earnings this week.

For a long time, the impact of the collapsing Petrodollar was concentrated almost entirely on African and Mid-east oil exporting nations, of which none has been impacted more perhaps that ground zero itself, Saudi Arabia, which has seen a record surge in its budget deficit as a result of collapsing oil revenue - the result of its ongoing war with the U.S. oil and gas sector and low cost "marginal" producers around the globe.

Submitted by Peter Sainsbury via OilPrice.com, “Like pushing a rock up a hill” That’s how some trader’s view the current disconnect between the physical market for crude oil and the futures market with speculators pushing futures prices higher while the physical market remains moribund.

Heightened speculation that the ECB will move next month, coupled with frustration with the euro offers in front of $1.40 level held, triggered a reversal of the dollar at the end of last week against the European currencies. As they weakened, cross positions were unwound, and the soft US Treasury yields lent the yen support.

By Matthew Bradbard: Energy: Crude oil gained for the first time in five sessions, closing just above $86/barrel in December. Upside should be contained around $87 on this contract. I am still searching for slightly lower trade however, if prices do no trade under $85 by this time next week, I will likely move to the sidelines. There is no need to stay in a choppy sideways market.

By Matthew Bradbard: Energy: Crude oil started the week 0.31% higher, closing just under its 8 day MA. Though $94 may be challenged, I expect prices to remain under that level and resume their downward move, dragging prices under $87/barrel. RBOB is just under $3/gallon at elevated levels that I do not think are sustainable. We need confirmation of a top, but I sense prices are due for a 20-25 cent correction. Clients have NO exposure currently.

By Matthew Bradbard: Energy: Overnight it appeared we were going to have a nice jump start to the week but as we draw to a close on the session crude appears to close lower by 1%. However a base looks to be forming and my take is still to be scaling into long positions around these levels anticipating a trade near $90/barrel in the coming weeks. On its highs RBOB tested the 18 day MA, a level that has served as resistance since late March.